Are Real Estate Agents Due Commission

The right of an Est Agent to earn commission is enshrined in accordance law. In general, commission is born when the Est Agent has perform patient’s requirement, regardless of the buy to let burnley amount of time or effort it took to perform the requirement.

In South Photography equipment, there is no limit to the amount of commission an Est Agent can charge. In the top end of the market, this often results in impressive earnings. These facts, with the public perception an Est Agent is often seen to do very little useful the fine rewards received, has encouraged many people to join the Est Agency industry. Finally count there were more than 72, 000 Estate Agents registered in South Photography equipment. Although, in practice, not all are make an effort to working as Estate Agents. Many Estate Agents are active only when the property market is buoyant and go dormant when the market reduces. Nevertheless, they are qualified to behave as Estate Agents and may resume activity if he or she feel, with the provision that they comply with certain requirements of the Est Agencies Affairs Act.

Giving rise to commission argument

Before we go on, it must be noted that most property deals go through without argument. However, this does not mean that of the deals that go through there was no reason for argument. Not really knowing is often a cause for valid claims not being made, mostly privately of the client. For such cases there is nothing one can do in retrospect, since all wrongs committed by Estate Agents are automatically made right upon date of transfer. No need to repent or visit confession, all sins are just amazingly wiped away.

In most cases commission differences arise simply as a result of false impression by the public as to their privileges and duties when they give an Est Agent a requirement. However, argument also arises due to false impression of Estate Agents as to their privileges and duties in performing a patient’s requirement. Both types of false impression can be easily avoided if Estate Agents spend more time being “frank” about discussing commission before accepting a requirement. In practice, this does not always happen, whether because of forgetfulness, lack of homework or because of pressure to get the requirement. Discussion surrounding commission is often relegated to a requirement form, placed in front of the client with the requirement of signing. This document merely serves to capture the basic details and rarely elaborates on definition of terms, privileges or duties at length.

Whilst it is sound business practice to record written the amount of commission and under what circumstances the requirement will be considered fulfilled, some mandates take out small points that are not in the Est Agency favor or the document itself serves to cover “conditions of absence in agreement” covered by common law. For example, under common law, in the absence of an agreement to the contrary, an Est Agent is not eligible to commission simply because, over a period of time, we have seen a conscientious effort to undertake a clients requirement.

Complying requirements

We have noted that certain common law principles govern an Est Agent’s directly to commission and that standard contracts are used to cover such privileges. We have also noted that such documents can fail to explain terms and can also be employed to protect the agent from common law principles that are not in the Estate Agents favor. Our remedy to reducing the potential for conflict is to encourage more open discussion and consultation of commission with clients by Estate Agents.

However, assuming such discussion were to happen, how is a person know whether or not an Est Agent is born commission when they themselves do not have enough information to ask the right questions during such discussion.

In this section we cover some of the points clients should be aware of, complying points that are often neglected or forgotten by even the most veteran and professional of Estate Agents.

The first thing to know is that the Est Agency Affairs Act and the Code of Conduct both have a direct affect an Estate Agents directly to receive commission. One of the most important requisites of the act is an Est Agent may only receive commissions on transactions concluded during a period which is why the Est Agent is in wardrobe of a valid Fidelity Fund Certificate.

Second thing to know is that Estate Agents who have not complied with the prescribed training requirements are not allowed to receive commission on agreements where they have drawn up or completed clauses in a sale or book agreement.

In addition to these requirements section 8 of the [Code of Conduct] sets forth conditions under an Est Agent can not qualify commission.

The effects of these three points are often not clarified to clients. Rarely, if, is a client furbished with a copy, or presented, an Estate Agents Fidelity Fund Certificate or a copy of the Code of Conduct. By the way, the Fidelity Fund Certificate is printed with a business card sized tear-off capable of fitting into a wallet where it can be easily kept like a drivers licence and presented when required. There should be no reason why a professional Est Agent with a valid Fidelity Fund Certificate should not wish to present it.

The act goes one step further. In addition to an individual Est Agent having to hold a valid Fidelity Fund Certificate, the Agency Company, all engaging owners and any person promoting or canvasing immovable property are also required to hold a valid Fidelity Fund Certificates. In the event that an agency does not have valid Fidelity Fund Certificate, or any of the Estate Agents or employees of the Agency, everyone employed with such agency are not eligible to claim commission.

In an industry with an increase of than 72, 000 agents, the public can easily be convinced to requirement the services of non-valid Estate Agents. Such persons, while operating illegally are not bound to operate under the Est Agency Affairs Act or the Code of Conduct. As a result the Est Agency Affairs Board, the organisation responsible for protecting the consumer, can only bring a criminal case against such persons and has no power to sanction any conduct. Whereas, if the Est Agent is operating with a valid Fidelity Fund Certificate, failure to comply with requirements comprises conduct worth sanction that may see the Estate Agents licence to operate terminated.
Performance of the requirement

Terms of requirement differ, but in general terms a requirement is seen to be fulfilled when:

  1. A buyer is introduced to the seller who is both legally and financially able to buy the property.
  2. A holding contract of sale is concluded. It is worth noting that a contract with suspensive conditions is not holding until such time so , conditions have been met.
  3. A transaction and its terms are significantly relative to the clients requirement.

Point 3 is interesting. The word “substantially” gives rise to a special twist. Since it means that, unless litigant makes express note that commission will only be paid when the contract is concluded on “exact terms stipulated”, a real estate agent is not required to execute a requirement to the exact letter. For example, if the client wants 500, 000 for a property and the highest offer attainable is 450, 000, the client cannot refuse to pay the full commission agreed.

A further twist of this case can develop where an introduced buyer does not enter into a sale, but instead enters into a book agreement. In this case, despite a book agreement being in place, the Est Agent is not deemed to have substantively completed the requirement and is not due commission as a different transaction to that particular which was mandated has come.

In practice we see this problem occurring all the time. An Est Agent ends a contract of sale at a price less that what the customer was made ready to accept. Then the seller wishes to negotiate the commission down.
Effective Cause

Many people assume that all they need do to qualify for commission is introduce a buyer and seller from wish a contract of sale is concluded. This is possibly one of the most common misconceptions shared by both Estate Agents and clients alike.

In fact an Est Agent is required to do the above and allow you to showing that he or she was the effective cause of the resulting transaction, north withstanding other factors. In reality many factors must be considered in order to demonstrate effective cause, including:

  • How much effort did a real estate agent put in. Simply giving a buyer and seller each others telephone numbers is not enough.
  • The time between introduction and sale. If buyer and seller conclude a sale right after introduction, the argument that the Est Agent was the effective cause is strong. However, if the sale agreement developed after the considerable period of time, the argument would be more difficult to prove.
  • The extent of consultation given by the est agent. If via an Estate Agents consultation more than one obstacles to conclusion of the sale where removed, then the effective cause is in favor of the Est Agent. However, if the obstacles were removed without assistance from the Est Agent, then the effective cause is most likely to lay with the buyer and seller.
  • Frequency of interaction. How often did the Est Agent communicate with the customer and did the agent cease dialogue with the buyer at any stage.


This article has in short , highlight a few of the main points concerning the privileges and duties of Estate Agents and clients using their services. While some often see the information provided as a method to try avoid paying Estate Agents commission, the ability to do so legally is not easy. However, clients that feel they have genuinely not been served by an Est Agent are not without alternative, if they have the information pertaining to their privileges and duties as clients.

Having said this, it must be noted that Estate Agents are not paid for good wishes or hard work, only for bottom-line results. As a result it is not possible to measure an Estate Agents performance by the amount of work they put into a deal. Many Estate Agents do put a huge amount of work into their deals and take great pride in adhering to professional conduct. By the same expression, an Est Agent can earn a lot of commission for relatively little work, but in this case runs the risk of getting nothing whatsoever if the requirement is neglected.

In closing it could be contended that the expectations and needs of clients would be better served if clients were better informed about both their own privileges and duties and those of Estate Agents. However, in order for service levels to be improved, clients must also be prepared to put in force their privileges and not accept broken Estate Agents or negligent service.

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